Agenda Date: 05/31/17 Agenda Item: 2F

STATE OF NEW JERSEY Board of Public Utilities

44 South Clinton Avenue, 3rd Floor, Suite 314 Post Office Box 350

Trenton, New Jersey 08625-0350 www.nj.gov/bpu/

ENERGY

IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE ITS SOCIETAL BENEFITS CHARGE (2017)

) ) ) ) )

ORDER APPROVING PROVISIONAL RATES

DOCKET NO. ER17020091

Parties of Record: ·

Philip J. Passanante, Esq., for the Atlantic City Electric Company Stefanie A. Brand, Esq., Director, New Jersey Division of Rate Counsel

BY THE BOARD:

By petition dated February 1, 2017, Atlantic City Electric Company ("ACE" or Company") filed a petition with the New Jersey Board of Public Utilities ("Board") requesting approval of changes in its Non-Utility Generation Charge ("NGC") and its Societal Benefits Charge ("SBC"). ("February 2017 Petition") By this Decision and Order, the Board considers a Stipulation for Provisional Rates ("Stipulation") entered into by ACE, the New Jersey Division of Rate Counsel ("Rate Counsel") and Board Staff ("Staff') (collectively the "Parties"), requesting that the Board approve changes in the NGC and SBC on a provisional basis, subject to refund with interest.

BACKGROUND

As a result of the Board's Final Decision and Order issued in Docket Nos. EO97070455, EO97070456, and EO97090457 ("Restructuring Order"),1 the Company implemented unbundled rates that included a Market Transition Charge ("MTG"), a Net Non-Utility Generation Charge ("NNC"), and the SBC as rate components. The Restructuring Order also established the components of the SBC and the associated cost recovery mechanisms.

1 In re ACE- Rate Unbundling, Stranded Costs and Restructuring Filings, BPU Docket Nos. E097070455. E097070456, and EO97070457 (Final Decision and Order dated March 30, 2001.)

www.nj.gov/bpu

Agenda Date: 05/31 (17 Agenda Item: 2F

Pursuant to the Restructuring Order, and to the extent that expenditures for these initiatives exceeded the amount of their allowed cost recovery, the expenditures were subject to deferred accounting treatment for future recovery at the close of the transition period. The Board further directed ACE to make a filing, no later than August 1, 2002, so the Board could consider the matter. By Order dated July 8, 2004,2 the Board finalized the Company's SBC, NNC, and MTG deferred cost components through the end of the transition period, July 31, 2003, and established new SBC, NNC, and MTG rates effective as of August 1, 2003.

By Order dated May 26, 2005,3 the Board approved a stipulation in ACE's 2003 base rate case, which adjusted and combined the NNC and MTG into the NGC, effective as of June 1, 2005.

COMPANY FILING

On February 1, 2017 the Company filed the February 2017 Petition and accompanying exhibits, including pre-filed direct testimony. The Company's NGC is designed to recover the above-market component of payments made under purchased power agreements ("PPAs") with non-utility generators ("NUGs"). The SBC components proposed to be revised by the instant petition are the Clean Energy Program component ("CEP") and the Uncollectible Accounts component ("UNG"). In the February 2017 Petition, the projected deferred balances were based on actual costs and revenues through December 31, 2016, and projected data for the period of January 1, 2017 through March 31, 2017. Through the course of the proceeding, ACE updated its proposed adjustments to the NGC and to the CEP and UNG components of the SBC based on projected deferred balances that included actual costs and revenues through March 31, 2017 ("March Update").

NGC

With respect to the NGC, the rate proposed in the March Update was designed to recover forecasted above-market NUG costs for the period April 1, 2017 through March 31, 2018, totaling $91.323 million. According to the Company, approval of the proposed rate would also recover the projected under-recovered balance of $1.288 million as of April 1, 2017. ·Based on the March Update, the net forecasted recovery for this period is $92.611 million, which is a decrease of approximately $42.396 million from what is currently being recovered in rates.

2 In re the Petition of Atlantic City Electric Company d/b/a Conectiv Power Delivery for Approval of Amendments to its Tariff to Provide for an Increase in Rates for Electric Service, BPU Docket No. ER02080510 (Final Order dated July 8, 2004.)3 In re the Petition of Atlantic City Electric Company d/b/a Conectiv Power Delivery for Approval of Amendments to its Tariff to Provide for an Increase in Rates for Electric Service- Phase I and Phase II ,and In re the Petition of Atlantic City Electric Company d/b/a Conectiv Power Delivery to Decrease the Level of its Net Non-Utility Generation Charge and Increase the Level of its Societal Benefits Charge. and In re the Petition of Atlantic City Electric Company for An Administrative Determination of the Value of Certain Fossil Generating Assets and In re the Petition of Atlantic City Electric Company for Approval of a Service Company Agreement, BPU Docket Nos. ER03020110, ER04060423, E003020091, and EM02090633 (Order dated May 26, 2005.)

2 BPU DOCKET NO. ER17020091

Agenda Date_; 05/31/17 Agenda Item: 2F

SBC (UNC AND CEP)

According to the March Update, the rates proposed for the UNG component of the SBC were designed to recover approximately $17.439 million for the period April 1, 2017 through March 31, 2018. Additionally, the proposed rate would recover from customers a projected under-recovered balance of $10.629 million as of April 1, 2017. The total forecasted recovery for this period is $28.068 million, which is an increase of approximately $15.462 million over what is currently being recovered in rates.

The rates proposed for the CEP component of the SBC were designed to recover approximately $27.186 million for the period April 1, 2017 through March 31, 2018. ACE has based its projections on the funding levels approved by the Bpard in its Order dated June 29, 2016 in Docket No. QO16040352. The Company represented that the average monthly expenditures from the fiscal year 2017 projected funding levels as found in the above Order were used to develop the monthly expenditures for the periods July 2017 to March 2018. In ad_dition, pased on an estimate of the CEP deferred balance through March 31, 2017, ACE anticipated a projected under-recovery of approximately $0.486 million. The total forecasted recovery for this period is $27.672 million, which is a decrease of approximately $4.794 million from what is currently being recovered in rates.

According to the March Update, the net impact of adjusting the NGC and the CEP and UNG components of the SBC [including Sales and Use Tax ("SUT")] would result in an overall annual rate decrease of approximately $31.728 million.

After notice, public hearings were held on May 9, 2017 in Mays Landing, New Jersey.

STIPULATION

Following a review by and subsequent discussions among the Parties, it was deter,mined that additional time is needed to complete a comprehensive review of the Company's February 2017 Petition. On May 10, 2017, the Parties executed the Stipulation, wherein the ·Parties agree as follows:4

1. The Parties have determined that, because the Company's filing contains issues that require additional review by the Parties, and that discovery is ongoing with respect to those issues, additional time is needed to assess any public comments and complete the review of the proposed rates and underlying costs for reasonableness and prudency. The Parties have agreed, however, that because the proposed combined changes to the NGC and SBC result in an overall rate reduction, based upon actual data through March 31, 2017, of $31.728 million, the implementation of provisional NGC and SBC rates is reasonable at this time. The interim rates proposed herein to become effective as of June 1, 2017 will be subject to refund upon a final determination of rates to replace or confirm the interim rates agreed upon in the Stipulation. Such final determination shall

4 Although summarized in this Order, the detailed terms of the Stipulation are controlling, subject to the findings and conclusions of this Order.

3 BPU DOCKET NO. ER17020091

Agencja Date: 05/31/17 Agenda Item: 2F

be concluded after further discovery, a prudence review, and the opportunity for an evidentiary hearing, if necessary.

2. The Company's filing in this matter included a projected over-recovered NGC balance as of March 31, 2017 of $1.983 million, including interest. The Parties agree that, based on the actual balance through March 31, 2017, this balance is projected to be an under-recovery of $1.288 million, including interest (Stipulation Schedule 1, page 1 of 3, line 23). For the period of June 1, 2017 through May 31, 2018, the total amount to be recovered will be approximately $92.611 million, including interest.

3. The Parties agree that the Company's updated filing in this proceeding with actual data through March 31, 2017, the end of the reconciliation period, indicates forecasted above-market NUG costs of $91.323 million for the period April 1, 2017 through March 31, 2018. The total period NGC costs that the Company proposes to recover through the provisional NGC rate equals $92.611 million (Stipulation Schedule 1, page 1 of 3, line 25). Accordingly, the Company will implement a provisional residential NGC rate of $0.011291 per kWh for the period June 1, 2017 through May 31, 2018 (Stipulation Schedule 1, page 1 of 3, line 37).

4. The Parties agree that the Company's updated filing as of March 31, 2017 in this proceeding indicates forecasted SBC costs for both the CEP and the UNC of $55.740 million.

For the CEP component of the SBC, the projected costs total $27.672 million. This total consists of $27 .186 million of projected CEP costs for the period April 1, 2017 through March 31, 2018 (Stipulation Schedule 2, page 1 of 2, line 23), and an under-recovered balance at March 31, 2017 of $0.486 million (Stipulation Schedule 2, page 2 of 2, line 15).

The forecasted total cost for the UNC component of the SBC is $28.068 million. This total includes $17.439 million of projected UNC costs for the period April 1, 2017 through March 31, 2018 (Stipulation Schedule 3, page 1 of 4, line 1), and an, under-recovered balance at March 31, 2017 of $10.629 million (Stipulation Schedule 3, page 2 of 4, line 15).

The Parties agree that the Company will implement a provisional CEP rate of $0.003352 per kWh (Stipulation Schedule 2, page 1 of 2, line 30) and a provisional UNC rate of $0.003400 per kWh (Stipulation Schedule 3, page 1 of 4, line 11 ). This represents a net increase of $0.001206 per kWh to the SBC rate.

5. According to the Company's calculation, the overall annual average monthly bill impact of the combined proposed NGC and SBC rate changes for a residential customer using 716 kWh per month results in a decrease of $2.59 or 1.89 percent (Stipulation Schedule 4, page 4 of 4). For informational purposes, as noted on Stipulation Schedule 4, a residential customer using 1000 kWh would see a decrease of $3.62 or 1.90 percent.

6. The Parties further acknowledge that implementation of the Stipulation will result in an overall decrease in NGC/SBC charges of $31.728 million, and that it is in the public interest to have that decrease become effective as of June 1, 2017. Therefore, the

4 BPU DOCKET NO. ER17020091

• Agenda Date: 05/31 /17 Agenda Item: 2F

Parties are requesting that the Board consider the Stipulation at its regularly scheduled agenda meeting for the month of May 2017.

7. The Parties further agree to the establishment of NGC and SBC rates designed for recovery from the Effective Date through May 31, 2018, as delineated in the Schedules attached to the Stipulation. The rates will be designed to reconcile the deferred balances and recover forecasted costs noted in the Stipulation. (See Stipulation Schedule 5 for the proposed Tariff pages incorporating the new rates.) As shown in Stipulation Schedule 4, the impact of the proposed rate changes for the period June 1, 2017 to May 31, 2018, including SUT, is an estimated annual decrease of $42.396 million related to the NGC component and an estimated annual increase of $10.668 million related to the SBC component (CEP and UNG combined). Consequently, the overall impact of the proposed rate changes is an estimated annual decrease of $31. 728 million (including SUT) for all components.

8. The Parties agree ACE will continue to explore opportunities to mitigate the terms of the ongoing NUG contracts. The Parties further agree that ACE will continue to file quarterly reports with Board Staff and Rate Counsel, showing the actual NGC and SBC deferred balances. The reports will also include a forecast of the deferred balance on March 31, 2018. The reports will include a variance analysis, including a narrative description, of the monthly projected versus actual updated deferred balances. To the extent that the forecast shows an under- or over-recovered deferred balance of more than $50 million at the end of the period, the Parties agree that ACE will, following consultation with Board Staff and Rate Counsel, file a petition to update the NGC and SBC components with an effective date prior to June 1, 2018.

DISCUSSION AND FINDING

The Board has carefully reviewed the record to date in this proceeding, including the petition, the March Update, and the attached Stipulation, which allows the Company to recover costs on a provisional basis. The Board FINDS that the Stipulation is reasonable, in the public interest, and in accordance with the law. Accordingly, the Board HEREBY ADOPTS the Stipulation as its own, as if fully set forth herein. ·

The Board HEREBY APPROVES, on a provisional basis, subject to refund with interest on any net over-recovered balance, a decrease in the CEP component of the SBC to $0.003352 per kWh including SUT, an increase in the UNG component of the SBC to $0.003400 per kWh including SUT, and a decrease in the NGC rate to $0.011291 per kWh, including SUT. For an average residential customer using approximately 716 kWh per month, the cumulative impact of these changes represents a decrease of approximately $2.59 or 1.89% on a total monthly bill.

These changes shall become effective as of June 1, 2017. The Board HEREBY ORDERS ACE to file revised tariff sheets conforming to the terms of the Stipulation by June 1, 2017.

The Company's costs will remain subject to audit by the Board. This Decision and Order shall not preclude nor prohibit the Board from taking any actions determined to be appropriate as a result of any such audit.

5 BPU DOCKET NO. ER17020091

The effective date of this Order is June 1, 2017.

DATED: S \ o \ \ \ 7

RICHARD S. MRO PRESIDENT

IHEREBY CERTIFY that the within document Is a true copy of the original In thefiles of the Board ofPublic Utllltles

(5L L~

Agenda Date: 05/31/17 Agenda Item: 2F

BOARD OF PUBLIC UTILITIES BY:

~K~ COMMISSIONER

6 BPU DOCKET NO. ER17020091

Agenda Date: 05/31/17 Agenda Item: 2F

In the Matter of the Petition of Atlantic City Electric Company to Reconcile and Update the Level of its Non-Utility Generation Charge its Societal Benefits Charge and its

Systems Control Charge (2017) - BPU Docket No. ER17020091

SERVICE LIST

Philip J. Passanante, Esq. Associate General Counsel ACE-92DC42 500 North Wakefield Drive Post Office Box 6066 Newark, DE 19714-6066 philip.passanante@pepcoholdinqs.com

Roger E. Pedersen Manager, NJ Regulatory Affairs, External Issues and Compliance ACE-63ML38 5100 Harding Highway Mays Landing, NJ 08330 roqer.pedersen@pepcoholdings.com

Ami Morita, Esq. Division of Rate Counsel 140 East Front Street, 4th Floor Post Office Box 003 Trenton, NJ 08625-0003 Amortia@rpa.state.nj.us

Diane Schulze, Esq. Division of Rate Counsel 140 East Front Street, 4th Floor Post Office Box 003 Trenton, NJ 08625-0003 Dschulze@rpa.state.nj.us

Geoffrey Gersten, DAG Division of Law 124 Halsey Street Post Office Box 45029 Newark, NJ 07101-45029 Geoffrey.gersten@lps.state.nj.us

Stefanie A. Brand, Esq. Director Division of Rate Counsel 140 East Front Street, 4th Floor Post Office Box 003 Trenton, NJ 08625-0003 sbrand@rpa.state.nj.us

Irene Kim Asbury, Esq. Secretary of the Board Board of Public Utilities 44 South Clinton Avenue, 3rd Floor, Suite 314 Post Office Box 350 Trenton, NJ 08625-0350 lrene.asbury@bpu.nj.gov

Thomas Walker, Director Division of Energy Board of Public Utilities 44 South Clinton Avenue, 3rd Floor, Suite 314 Post Office Box 350 Trenton, NJ 08625-0350 Thomas.walker@bpu.nj.gov

Stacy P,eterson, Deputy Director Division of Energy Board of Public Utilities 44 South Clinton Avenue, 3rd Floor, Suite 314 Post Office Box 350 Trenton, NJ 08625-0350 Stacy.peterson@bpu.nj.gov

Rachel Boylan, Esq. Counsel's Office Board of Public Utilities 44 South Clinton Avenue, 3rd Floor, Suite 314 Post Office Box 350 Trenton, NJ 08625-0350 Rachel.boylan@bpu.nj.gov

7 BPU DOCKET NO. ER17020091

mailto:Rachel.boylan@bpu.nj.govmailto:Stacy.peterson@bpu.nj.govmailto:Thomas.walker@bpu.nj.govmailto:lrene.asbury@bpu.nj.govmailto:sbrand@rpa.state.nj.usmailto:Geoffrey.gersten@lps.state.nj.usmailto:Dschulze@rpa.state.nj.usmailto:Amortia@rpa.state.nj.usmailto:roqer.pedersen@pepcoholdings.commailto:philip.passanante@pepcoholdinqs.com

Agenda Date: 05/31/17 Agenda Item: 2F

Alex Moreau, DAG Division of Law 124 Halsey Street Post Office Box 45029 Newark, NJ 07101-45029 Alex.moreau@dol.lps.state.nj.us

Veronica Beke, DAG Division of Law 124 Halsey Street Post Office Box 45029 Newark, NJ 07101-45029 Veronica.beke@dol.lps.state.nj.us

Caroline Vachier, DAG Division of Law 124 Halsey Street Post Office Box 45029 Newark, NJ 07101-45029 Caroline. vachier@dol. lps.state. nj. us

8 BPU DOCKET NO. ER17020091

mailto:Veronica.beke@dol.lps.state.nj.usmailto:Alex.moreau@dol.lps.state.nj.us

atlantic citljPhilip J. Passanante Assistant General Counsel electtic®

An Exelon Company 92DC42 302.429,3105- Telephone PO Box 6066 302.429.3801 - Facsimile Newark, DE 19714-6066 phillp.passanante@pepcoholdings.com

500 N. Wakefield Drive atlanticcityelectric.com Newark, DE 19702

May 10, 2017

VIA FEDERAL EXPRESS and ELECTRONIC MAIL irene.asbury@bpu.nj.gov board.secretary@bpu.nj.gov

Irene Kim Asbury, Esquire Secretary of the Board Board of Public Utilities 44 South Clinton Avenue, 3rd Floor, Suite 314 P.O. Box350 Trenton, New Jersey 08625-0350

RE: In the Matter of the Petition of Atlantic City Electric Company to Reconcile and Update the Level oflts Non-Utility Generation Charge and Its Societal Benefits Charge (2017)

BPU Docket No. ERl 7020091

Dear Secretary Asbury:

Enclosed herewith for filing are eleven conformed copies of a fully executed Stipulation for Provisional Rates (the "Stipulation") in connection with the above-referenced matter. It is Atlantic City Electric Company's understanding that the Stipulation will be placed on the agenda for consideration at the regular meeting currently scheduled to be held on Wednesday, May 31, 2017.

Thank you for your cooperation and courtesies. Feel free to contact me with any ~ questions or ifl can be of further assistance.

/jpr ssanante

·-.;:::-·,..-Y at Law of the State ofNew Jersey

Enclosure

cc: Service List

mailto:board.secretary@bpu.nj.govmailto:irene.asbury@bpu.nj.govhttp:atlanticcityelectric.commailto:phillp.passanante@pepcoholdings.com

STATE OF NEW JERSEYIN THE MATTER OF THE PETITION OF BOARD OF PUBLIC UTILITIESATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE STIPULATION FORLEVEL OF ITS NON-UTILITY PROVISIONAL RATESGENERATION CHARGE AND ITS SOCIETAL BENEFITS CHARGE (2017) BPU DOCKET NO, ERl7020091

APPEARANCES:

Philip J. Passanante, Esquire, Assistant General Counsel, for Atlantic City Electric Company

Ami Morita, Deputy Rate Counsel; and Diane Schulze, Assistant Deputy Rate Counsel, on behalf of the Division of Rate Counsel (Stefanie A. Brand, Director, Division of Rate Counsel)

Alex Moreau, Deputy Attorney General, and Veronica Beke, Deputy Attorney General, on behalf of the Staff of the New Jersey Board of Public Utilities (Christopher S. Porrino, Attorney General ofNew Jersey)

PROCEDURAL HISTORY

On or about February 1, 2017, Atlantic City Electric Company ("ACE" or the

"Company") filed a Verified Petition (the "2017 SBC/NOC Petition") with the New Jersey

Board of Public Utilities (the "Board") seeking the Board's approval to reconcile and update

ACE's Non-Utility Generation Charge ("NGC") and Societal Benefits Charge ("SBC"). The

matter was docketed as BPU Docket No. ERi 7020091.

ACE's NGC provides for recovery of the above-market portion of payments made

pursuant to the Company's Non-Utility Generation ("NUG") contracts. ACE's SBC was

established to recover costs related to: the Universal Service Fund and Lifeline social programs;

Clean Energy Programs ("CEP"); and Uncollectible Accounts ("UNC").

The purpose of the 2017 SBC/NOC Petition is to reconcile and reset the levels of the

NGC and two components of the SBC for the current annual period of June 1, 2016 through

1

March 31, 2017, and the projected period of April I, 2017 through March 31, 2018. The SBC

components to be changed include the CEP and the UNC charges. In the 2017 SBC/NGC

Petition, the projected deferred balances included actual costs and revenues through December

31,2016.

Subsequent to its initial filing of the 2017 SBC/NGC Petition, ACE updated its proposed

adjustments to the NGC and the CEP and UNC components of the SBC based on actual data as

ofJanuary 31, 2017, February 28, 2017 and again as of March 31, 2017.

Representatives from the Company, Board Staff, and the New Jersey Division of Rate

Counsel ("Rate Counsel") Gointly referred to herein as the "Parties") have held discussions with

respect to this matter, including a settlement conference call on April 12, 2017.1 As a result of

those discussions, the Parties to this Stipulation STIPULATE AND AGREE as follows:

I. The Parties have determined that, because the Company's filing contains issues

that require additional review by the Parties, and that discovery is ongoing with respect to those

issues, additional time is needed to assess any public comments and complete the review of the

proposed rates and underlying costs for reasonableness and prudency. The Parties have agreed, '

however, that because the proposed combined changes to the NGC and SBC result in an overall

rate reduction, based upon actual data through March 31, 2017, of $31.728 mjllion, the

implementation of provisional NGC and SBC rates is reasonable at this time. The interim rates

proposed herein to become effective as of June I, 2017 will be subject to refund upon a final

determination of rates to replace or confirm the interim rates agreed upon in this Stipulation.

1 Public hearings have been scheduled for the afternoon and evening of May 9, 2017 in the Company's service area, with notice of these public hearings being published in newspapers having general circulation in ACE's service territory.

2

Such final determination shall be concluded after further discovery, a prudence review, and the

opportunity for an evidentiary hearing, if necessary.

2. The Company's filing in this matter included a projected over-recovered NGC

balance as of March 31, 2017 of $1.983 million, including interest. The Parties stipulate,

acknowledge, and agree that, based on the actual balance through March 31, 2017, this balance is

projected to be an under-recovery of $1.288 million, including interest (Settlement Schedule 1,

page I of 3, line 23). For the period of June I, 2017 through May 31, 2018, the total amount to

be recovered will be approximately $92.611 million, including interest.

3. The Parties stipulate, acknowledge, and agree that the Company's updated filing

in this proceeding with actual data through March 31, 2017, the end of the reconciliation period,

indicates forecasted above-market NUG costs of $91.323 million for the period April I, 2017

through March 3 I, 2018. The total period NGC costs that the Company proposes to recover

through the provisional NGC rate equals $92.611 million (Settlement Schedule 1, page I of 3,

line 25). Accordingly, the Company will implement a provisional residential NGC rate of

$0.011291 per kWh for the period June I, 2017 through May 31, 2018 (Settlement Schedule 1,

page I of 3, line 37).

4. The Parties acknowledge, stipulate, and agree that the Company's updated filing

as of March 31, 2017 in this proceeding indicates forecasted SBC costs for both the CEP and the

UNC of$55.740 million.

For the CEP component of the SBC, the projected costs total $27.672 million. This total

consists of$27.186 million of projected CEP costs for the period April I, 2017 through March

31, 2018 (Settlement Schedule 2, page I of 2, line23), and an under-recovered balance at

March 31, 2017 of$0.486 million (Settlement Schedule 2, page 2 of 2, line 15).

3

The forecasted total cost for the UNC component of the SBC is $28.068 million. This

total includes $17.439 million of projected UNC costs for the period April I, 2017 through

March 31, 2018 (Settlement Schedule 3, page I of 4, line I), and an under-recovered balance at

March 31, 2017 of $10.629 million (Settlement Schedule 3, page 2 of 4, line 15).

The Parties agree that the Company will implement a provisional CEP rate of $0.003352

per kWh (Settlement Schedule 2, page I of 2, line 30) and a provisional UNC rate of$0.003400

per kWh (Settlement Schedule 3, page I of 4, line 11). This represents a net increase of

$0.001206 per kWh to the SBC rate.

5. According to the Company's calculation, the overall annual average monthly bill

impact of the combined proposed N GC and SBC rate changes for a residential customer using

716 kWh per month results in a decrease of $2.59 or 1.89 percent (Settlement Schedule 4, page

4 of 4). For informational purposes, as noted on the aforementioned Settlement Schedule 4, a

residential customer using 1000 kWh would see a decrease of $3.62 or 1.90 percent.

6. The Parties further acknowledge that implementation of this Provisional

Stipulation wi!l result in an overall decrease in NGC/SBC charges of $31.728 million, and that it

is in the'public interest to have that decrease become effective as of June I, 2017. Therefore, the

Parties are requesting that the Board consider this provisional Stip,plation at its regularly

scheduled agenda meeting for the month ofMay 2017.

7. The Parties further stipulate and agree to the establishment ofNGC and SBC rates

designed for recovery from the Effective Date through May 3 I, 2018, as delineated in the

Settlement Schedules attached to this Stipulation. The rates will be designed to reconcile the

deferred balances and recover forecasted costs noted in this Stipulation. (See Settlement

Schedule 5 for the proposed Tariff pages incorporating the new rates.) As shown in Settlement

4

Schedule 4, the impact of the proposed rate changes for the period June 1, 20 I 7 to May 31,

2018, including Sales and Use Tax, is an estimated annual decrease of$42.396 million related to

the NGC component and an estimated annual increase of $10.668 million related to the SBC

component (CEP and UNC combined). Consequently, the overall impact of the proposed rate

changes is an estimated annual decrease of $31.728 million (including Sales and Use Tax) for all

components.

8. The Parties agree ACE will continue to explore opportunities to mitigate the terms

of the ongoing NUG contracts. The Parties further agree that ACE will continue to file quarterly

reports with Board Staff and Rate Counsel, showing the actual NGC and SBC deferred balances.

The reports will also include a forecast of the deferred balance on March 31, 2018. The reports

will include a variance analysis, including a narrative description, of the monthly projected

versus actual updated deferred balances. To the extent that the forecast shows an under- or over-

recovered deferred balance of more than $50 million at the end of the period, the Parties agree

that ACE will, following consultation with Board Staff and Rate Counsel, file a petition to

update the NGC and SBC components with an effective date prior to June 1, 2018. '

9. It is a condition of this Stipulation that the Board issue an Order approving the

provisional rates agreed upon in this Stipulation on an interim~ basis without change or further

conditions. Should the Board fail to issue such an Order, this Stipulation shall be deemed null

and void and of no force and effect. In the event this condition is not satisfied for any reason,

then neither the existence of this Stipulation nor its provisions shall be disclosed or utilized by

'any Party or person for any purpose whatsoever, including in this or any other proceeding. The

Parties agree that this Stipulation is a negotiated agreement and represents a reasonable balance

of the competing interests involved in this proceeding. The contents of this Stipulation shall not

5

in any way be considered, cited or used by any of the Parties as an indication of any Party's

position on any .related or other issue litigated in any other proceeding or forum, except to

enforce the terms of this Stipulation. Notwithstanding anything to the contrary set forth herein;

upon the occurrence of any of the following, this Stipulation shall terminate:

(a) if the Board issues a decision disapproving the Stipulation; or

(b) if the Board issues a written Order approving this Stipulation subject to

any condition or modification of the terms set forth herein that an

adversely affected Party, in its discretion, finds unacceptable, then such

Party shall serve notice of unacceptability on the other Parties within

seven business days following receipt of such Board Order. Absent such

notification, the Parties shall be deemed to have waived their respective

rights to object to or appeal the acceptability of such conditions or

modifications contained in the Board Order, which shall thereupon

become binding on all Parties.

10. This Stipulation may be executed in any number of counterparts, each of which

shall be considered one and the same agreement, and shall become effective when one or more

counterparts have been signed by each of the Parties.

CONCLUSION

WHEREFORE, for the reasons set forth above, the Parties respectfully submit this

Stipulation for Provisional Rates and request that the Board issue an Order on Provisional Rates

adopting this Stipulation in its entirety, in accordance with the terms hereof, to make the

proposed Provisional Rates effective on and after June 1, 2017.

Respectfully submitted,

6

Dated: May 1, 2017

Assistant General Counsel 500 North Wakefield Drive, 92DC42 P.O. Box 6066 Newark, DE 19714-6066 (302) 429-3105 - Telephone (Delaware) (302) 429-3801 - Facsimile (609) 909-7034 - Telephone (Trenton) philip.passanante@pepcoholdings.com

7

mailto:philip.passanante@pepcoholdings.com

' . '

Dated: S"-'1- 17 ·

CHRISTOPHER S. PORRINO ATTORNEY GENERAL OF NEW JERSEY Attorney for the Staff of the

:~'~&- _,Alex MoreauNeronica Beke Deputy Attorney General

DIVISION OF RATE COUNSEL STEFANIE A. BRAND Director

By: __,_\l)_l,(W,.-( [;_'M_·. _____ _--z_ Diane Schulze Assistant Deputy Rate Counsel

8

Settletnent

Schedule 1

Atlantil:: City Electric Company Settlement Schedule 1 Net Non-Uh1ity Generation Charge (NGC) Rale Design Page 1 of3 Rates Effective For Period June 2017 - May 2018 Updated for Actuals through March 2017

Line 1 Table 1 Forecasted NUG Costs 2 3 Aer11• Ma):'.17* Ju_n-17 Jul-17 Aug-17 see-11 4 5 NGCCosts s 11,621,743 s 11,942,016 13,375,151 ' 14,049,444 $ 14,763,858 $ 13,663,244 6 Market-Based Revenue ($000) $ 2,586,132 s 2,926,057 4,065,772 $ 5,673,596 $ 5,683,918 $ 4,034,878 7 RetaU Revenue Collected in Cuirent Rates $ 9584810 s 9,031,464 6 Above Markel NUG Costs ($000) s {549,199} $ {15 504) 9 309 379 $ 8,375,848 $ 9,079,940 $ 9,628 366 9 10 Oct-17 Nov-17 Oec-17 Jan-18 Feb-18 Mar-18 Aer-17 to Mar-18 11 u NGCCosts s 12,710,302 s 12,481,522 14,120,180 $ 14,553,349 $ 13,717,697 $ 12,668,777 $ 159,867,483 11 Market-Based Revenue ($000) s 3,167~118 $ 3,171,421 5,374,661 ' 5,519,098 $ 4,503,323 $ 3,221,967 $ 49,927,941 M Retail Revenue Collected in Current Rates $ 18,616 274 15

• Above Market NUG Costs ($000) s 9 543184 $ 9,310,101 6,745 519 $ 9 034,250 s 9,214,574 $ 9,646,810 $ 91,323,269

~•19

Projected Contract Cost ($000) Forecasted Market -Based Revenue ($000)

159,867,463 49,927,941

= Line 5 + Line 12 = Line 6 + Line 13

w Retail Revenue Collected in Cun-ent Rates 18616274 =Line7+Une14 ~ Forecasted Above Market NUG Costs ($000) 91,323,269 =Line18-Line19-Line20 ~

••••D••• ~

Projected Under Recovered Balance AtApn11, 2017

Total Period NGC Costs

Table 2 NGC Rilte with Voltage Level Loss Adjustment Voltage Level Loss Factor Secondaiy (120. 480 Volts) 1.07149 Primaiy (4,000 &12,000 Volts) 1.04345 Subtransmission (23,000 & 34,500 Volts) 1.03160

1,287,847

92.&!.!,_116

Se!tlamenl Schedule 1 Page 2 Col 9 Line 15

Line 21 + Line 23

~

•M

Transmission (69,000 Volts)

Col.1

1.02150

Col.2 Col.3 Col.4 Col.5 Col.6 Col. 7 Col.6 Col. 9 =Col.3Lines37-44/ =Col.4xSum "'Col.6x

35 =Col.1xCo1.2 Col. 3 Une 45 (Lines 21 + 23) =Col.5/Col.2 ((1/(1--0.00242)}-1) =Col.6+COl.7 =Col.6x1.06875 Sales@ Customer Sales@ Bulk System - Allocated Revenue BPU Assessment Final NGC Rate Final NGC Rate wl

36 37 RS

Rate Class Loss Factor 1.07149

Q!;Wll} 4,171,964,933

Including Losses 4,470,216,707

Allocation Factor 0.4748

Reguirements $ 43,970,705

NGC Rate {$/kWh) $ 0.010540

($/kWH) $ 0.000026 $

($/kWh) 0.010565

SUT($/k.Wh) $ 0.011291

38 39 40 41 42

MGS Secondaiy MGS Primary AGS Secondary AGS Primary TGS

1.07149 1.04345 1.07149 1.04345 1.02150

1,152,950,

AUantic City Electric Company Settlement Schedule 1 Summa,y of Non Utility Generation {NGC) Dererral Page2of3 Rates Effective For Period June 2017- May 2018 Updated for Actuals through March2017

£QL...1 Q2U ,,,,._, o,u ~ Col. 6 Col. 6a i;,u Stipulated

o,u """' "'1..1!! "'1..1.1 OoL.12 After-Tu ""-'-' "'1Ji Joint Settlement Amortiution Pre-Tu Interest After-Tu Average Annual lntereGt

Retall NGC PJM Interchange Most Favored Nation Adjustments Cumulative Rollover Cumulative Monthly Interest Line No. Moofu Revenues Revenues Exeenses Provision (MF~ Exeenses =. Deferral Deferral Deferral Balance Rate

1 Aetual Apr-16 $ 9,301,027 $ 6,174,690 $ 15,875,800 $ (2,703,399) $ (3,103,482) $ (21,361,154) $ {12,635,123) $ {11,717,268) 0.42% $ (4,101) 2 Aetual May-16 $ 8,415,643 $ 6,130,919 $ 16,839,510 $ (2,702,171) $ (4,995,118) $ (26,356,273) $ (15,589,735) $ (14,112,429) 0.41% $ (4,822) 3

•'6

"11 12 13,. "

Actual Jun-16 $ 10,861,584 $ 5,631,762 $ 17,509,679 Actual Jul-16 $ 13,816,242 $ 8,089,491 $ 18,058,173

Aug-16 $ 16,543,79" $ 8,412,82.fl $ 19,117,707""""Actual Sep-16 $ 16,157,320 $ 5,161,783 $ 15,158,292 Actual Oct-16 6,728,000 $ 4,269,223 $ 13,211.m Actual Nov-16 • 8,763,407 $ 3,644,161 12,204,089 9,98'1,316 Actual Dec-16 • 9,843,703 $ 5,185,679 •$ 14,on,2a2 • Actual Jan-17 14,175,866 ' $ 10,928,390 5,877,863 Actual Feb-17 10,122,299 ' 3,576,515 ' $ 12,582,155 Actual Mar-17 17,110,826 ' $ 9,167,422 ' $ 5,604,348 $

Total Interest Aug2016-Mar2017 Total Overl(Undl!r) Recovered Balance at April 1, 2017 >>>>>>>>>>>>>>>>>>>>>>>>>>»•>>>>>>>>>>»·>>>

$ $

'$••$ ' $ $

$ $

'$••' ' $ $

(1,016,333) $ 3,847,560 $ 5,838,911 $ 6,160,811 $

(2,280,550) $ 10,187,795

952,100 ' 2,630,388 • 1,116,659 •$

(2,339,057) $

•'

(27,372,605) (23,525,0o!S) (17,707,582) (11,546,772) (13,827,322) (3,639,527) (2,687,427)

(57,039) 1,059,620

(1,279,437)

(8,410) !1~784rl:

$ (21,447)

$ $ $

••••'••

(16,190,896) (13,915,064) (10,474,035) (6,829,915) (8,178,861) (2,152,780) (1,589,613)

(33,739) 626,765

(756,787)

$ $ $ $ $ $ $ $

•$

(15,890,316) {15,052,980) (12,194,550) (8,651,975) (7,504,388) (5,165,821) (1,871,197)

(911,676) 296,513 (65,011)

0.41% .0.36% 0.33% 0.23% 0.27% 0.26% 0.32% 0.41% 0.86% 0.50%

$ (5,376) $ (4,516) $ (3,343) $ (1,685)

(1,673)•$ (1,119) (499).,,,••$ 213

• "" (8,410)•

10

20

30

40

50

60

• •

• • • • • • •

• • • • • • • • • •

• • • • •

Atlantic City Electric Company Settlement Schedule 1 Amortization of Under Recovered NGC Balance Paga3of3 Amortization for Period July 2012 to May 2016 Amortization Rate to be Effective For Period July 2012 - May 2016 Updated for Actuals through March 2017

Line 1 Total Under Recovered To Be Amortized 126,973,199 Settlement ER12020173 Schedule 1 Page 3 of 4 2 ' 3 Interest Rate (Pre-Tax) 0.92% Settlement ER12020173 Schedule 1 Page 3 of 4 4 Interest Rate (After-Tax) 0.55% Settlement ER12020173 Schedule 1 Page 3 of 4 5 Amortization Period (Years) 3.9 Settlement ER12020173 Schedule 1 Page 3 of 4 6 Amortization ~ 7 Total Annual Balance Per Year 32 418 689 Settlement ER12020173 Schedule 1 Page 3 of 4 8

• ' 9 Column Totals 126,973,199 1,355,862 Col.1 Col. 2 Co1.3 Col. 4 Col. 5 11 12 Total Total Monthly Total Total 13 Period Month Startin9 Balance Amortization Interest Endln9 Balance 14 Deferral Starting Balance s 126,973,199 15 1 Ju!-12 $ 126,973,199 2,701,557 57,082 124,271,641

'

16 2 Aug-12 124,271,641 2,701',557 55,855 121,570,084 17 3 Sep-12 $ 121,570,084 2,701,557 54,627 118,868,527• • ' •• ' •18 4 Oct-12 116,868,527 2,701,557 53,400 116,166,969• ' •19 5 Nov-12 116,166,969 2,701,557 52,172 113,465,412 ' • ' •6 Oec-12 $ 113,465,412 2,701,557 50,945 110,763,654 ' • '• •21 7 Jan-13 110,763,654 2,701,557 49,717 108,062,297 22 8 Feb-13 108,062,297 2,701,557 48,489 105,360,739 23 9 Mar-13 105,360,739 2,701,557 47,262 $ 102,659,162 ' ••24 10 Apr-13 $ 102,659,182 2,701,557 46,034 99,957,625• ' •25 11 May-13 99,957,625 2,701,557 44,607 $ 97,256,067• • ' 26 12 Jun-13 $ 97,256,067 2,701,557 43,579 94,554,510 27 13 Jul-13 $ 94,554,510 $ 2,701,557 42,352 91,852,952• ' ••' •28 14 Aug-13 91,852,952 2,701,557 41,124 $ 69,151,395•29 15 Sep-13 89,151,395 $ 2,701,557 39,696 66,449,836

16 Oct-13 $ 86,449,838 $ 2,701,557 38,669 $ 63,748,280 ' •' •' •31 17 Nov-13 83,748,280 $ 2,701,557 $ 37,441 81,046,723

32 18 Oec-13 $ 61,046,723 2,701,557 36,214 76,345,165 33 19 Jan-14 $ 78,345,165 2,701,557 34,986 75,643,606 34 20 Feb-14 75,643,606 2,701,557 $ 33,758 72,942,050 35 21 Mar-14 $ 72,942,050 2,701,557 32,531 70,240,493 ' • •36 22 Apr-14 $ 70,240,493 2,701,557 31,303 67,538,936 37 23 May-14 67,538,936 2,701,557 ' 30,076 64,837,378 38 24 Jun-14 ' $ 64,837,378 •$ 2,701,557 ' 28,648 •• 62,135,821 39 25 Jul-14 62,135,621 2,701,557 27,621 59,434,263

• ' • • ' 26 Aug-14 59,434,263 2,701,557 26,393 56,732,706 ' ' '

Sep-14 56,732,706 2,701,557 25,165 54,031,148 42 28 Oct-14 ' 54,031,148 •$ 2,701,557 ' 23,938 •• 51,329,591 43 29 Nov-14 $ 51,329,591 2,701,557 22,710 48,628,034

41 27 ' • ' ' ' • ' •

44 30 Dec-14 $ 48,628,034 2,701,557 21,483 45,926,476 ' •45 31 Jan-15 45,926,476 ' 2,701,557 ' 20,255 43,224,919 46 32 Feb-15 $ 43,224,919 2,701,557 19,027 $ 40,523,361

47 33 Mar-15 ' $ 40,523,361 • 2,701,557 ' ' 17,600 37,821,804

48 34 Apr-15 37,821,804 2,701,557 16,572 35,120,246 49 35 May-15 •$ 35,120,246 • 2,701,557 ' 15,345 •• 32,418,689

36 Jun-15 • 32,418,689 $ ' 2,701,557 ' 14,117 • 29,717,132 51 37 Jul-15 $ 29,717,132 • 2,701,557 ' 12,890 $ 27,015,574 52 38 Aug-15 $ 27,015,574 2,701,557 ' 11,662 $ 24,314,017 53 39 Sep-15 $ 24,314,017 2,701,557 10,434 $ 21,612,459 54 40 Oct-15 $ 21,612,459 $ ' 2,701,557 ' 9,207 18,910,902 55 41 Nov-15 $ 18,910,902 2,701,557 ' 7,979 16,209,345 56 42 Dec-15 $ 16,209,345 •$ 2,701,557 •• 6,752

••• 13,507,787 57 43 Jan-16 $ 13,507,787 $ 2,701,557 5,524 $ 10,806,230

• '

58 44 Feb-16 $ 10,806,230 2,701,557 4,297 $ 6,104,672• ' 59 45 Mar-16 8,104,672 2,701,557 3,069 $ 5,403,115• ' 46 Apr-16 5,403,115 2,701,557 1,841 $ 2,701,557 61 47 May-16 ' 2,701,557 $ 2,701,557 ' $ 614 $ 0 62 48 Jun-16

• 0 $ $ 0 0 ' • ' ' ' Notes: 1) Monthly Amortizations= Amortization Balance Per Year J 12 Months (Adjusted for 47 month Amortization)

2) Interest= Average Monthly Balance• Interest Rate Per Month Average Monthly Balance= (Prior Month Ba!ance + Current Month Balance)/ 2 Interest Rate Per Month= Interest Rate (After Tax)/ 12 months

Settle1nent

Schedule 2

Atlantic City Electric Company Settlement Schedule 2 NJ Clean Energy Program Funding Rate Design Page 1 of 2 Rates Effective For Period June 2017 - May 2018 ' Updated for Actuals through March 2017

Line No. 1 Table 1 Projected Comprehensive Resource Analysis Program Expenditures April 2017 - March 2018 2 3 Month Projected Expenditl.lre 4 5 Apr-17 $ (42,895) • *Represents Expenses for April and May 17 minus projected retail revenue to be collected in current rates. 6 May-17 $ 32,117 7 Jun-17 $ 2,515,930 Projected based on NJBPU QO16040352 Order 8 Jul-17 $ 3,195,841 dated 6/29/2016 FY2017 Annual Expenditures 9 Aug-17 $ 3,426,172

10 Sep-17 $ 3,144,645 11 Oct-17 $ 2,490,747 12 Nov-17 $ 2,228,422 13 Dec-17 $ 2,401,753 14 Jan-18 $ 2,722,437 15 Feb-18 $ 2,582,671 16 Mar-18 $ 2,487,938 17 18 Total $ 27,185,776 19 20 21 Table 2 Clean Energy Program Funding Rate Design June 2017 - May 2018 22 23 Total Period Expenditures $ 27,185,776 =Line 18 24 Recovery of NJ Clean Energy Program Funding Deferral Balance ! 485,983 Settlement Schedule 2, Page 2, Col. 7 Row 15 25 Total Clean Energy Program Recovery $ 27,671,759 =Line 23 + Line 24 26 Projected Delivered Sales June 2017 - May 2018 8,845,560,805 27 Clean Energy Program Funding Rate ($/kWh) $ 0.003128 28 BPU Assessment $ 0.000008 29 Rate without SUT ($/kWh) $ 0.003136 30 Rate Including $UT ($/kWh) $ 0.003352

' Atlantic City Electric Company Setuement Schedule 2 Summary of Clean Energy Program Deferral Page2of2 Rates Effective For Period June 2017 - May 2018 Updated for Acluals through March 2017

Col.1 Col.2 Col.3 Col.4 Col.5 Col.6 Col. 7 Col.8 Col.9 Col.10 Col. 11 Col.12 After-Tax

Pre-Tax After-Tax Average Annual Deferral Interest Deferral Monthly Interest

Line No. Month Revenues E~enses Deferral Cumulative Rollover Cumulative Balance Rate Interest 1 Actual Apr-16 $ 2,204,763 $ 2,164,816 $ 39,947 $ 137,201 $ 81,155 $ 69,340 0.42% $ 24 2 Actual May-16 $ 2,004,892 $ 2,275,386 $ (270,494) $ (133,293) $ (78,843) $ 1,156 0.41% $ 0 3 Actual Jun-16 $ 2,607,563 $ 2,557,317 $ 50,246 $ (83,046) $ (49,122) $ (63,982) 0.41% $ (22) 4 Actual Jul-16 $ 3,273,529 $ 2,632,090 $ 641,439 $ 558,392 $ 330,289 $ 140,584 0.36% $ 42 5 Actual Aug-16 $ 3,905,672 $ 3,924,783 $ (19,111) $ 540,662 $ 1,380 $ 319,801 $ 325,045 0.33% $ 89 6 Actual Sep-16 $ 3,822,532 $ 3,201,743 $ 620,788 $ 1,161,450 $ 686,998 $ 503,400 0.23% $ 96 7 Actual Oct-16 $ 1,572,333 $ 2,494,609 $ (922,277) $ 239,173 $ 141,471 $ 414,234 0.27% $ 93 8 Actual Nov-16 $ 2,084,043 $ 2,308,390 $ (224,348) $ 14,826 $ 8,769 $ 75,120 0.26% $ 16 9 Actual Dec-16 $ 2,332,565 $ 2,366,608 $ {34,043) $ (19,218) $ (11,367) $ (1,299) 0.32% $ (0) 10 Actual Jan-17 $ 2,617,773 $ 2,691,032 $ (73,259) $ (92,477) $ (54,700) $ (33,034) 0.41% $ (11) 11 Actual Feb-17 $ 2,479,712 $ 2,578,214 $ (98,503) $ (190,979) $ (112,964) $ (83,832) 0.86% $ (60) 12 Actual Mar-17 $ 2,249,243 $ 2,544,387 $ (295,144) $ (486,123) $ (287,542) $ (200,253) 0.50% $ (83) 13 14 Total Interest Aug2016-Mar2017 $ 140 $ 140 15 Total Over/(Under) Recovered Balance >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> $ (485!983}

Settle1nent

Schedule 3

Atlantic City Electric Company Uncollectible Charge Rate Design Rates Effective For Period June 2017 - May 2018 Updated for Actuals through March 2017

Line No. 1 Projected Uncollectible Expense (April 2017 - March 2018) 2 3 Under Recovered Balance At April 1, 2017 4 5 Total Uncollectible Recovery 6 7 Projected Delivered Sales June 2017 - May 2018 8 Uncotlectible Rate ($/kWh) 9 BPU/RPA Revenue Assessment 10 Final Uncollectible Rate ($/kWh) 11 Final Uncollectib!e Rate including SLIT ($/kWh)

$ 17,439,396

$ 10,628,815

$ 28,068,211

8,845,560,805 $ 0.003173 $ 0.000008 $ 0.003181 $ 0.003400

Settlement Schedule 3, Page 4 Line 15

Settlement Schedule 3 Page 2, Column 7 Line 15

Line 1 + Line 3

Settlement Schedule 3 Page 1 of 4

Atlantic City Electric Company Settlement Schedule 3

Summary of Uncolleciible Account Deferral Page2of4 Rates Effective For Period June 2017 - May 2018 Updated for Actuals through March 2017

QQ!...1. .QQ!..Z .QQU Col.4 Col.5 i;,,u; Col. 6a Col.Sb Col. 7 Col.8 Col.9 ~ C.Q!.11 ~ Prior Period & After-Tax

uncollectible Uncollectible Joint Settlement Stipulated "" Pre-Tax After-Tax Average Annual Line No. Month

Accounts Revenues

Accounts Exeenses

Most Favored Nation Provision {MFN)

Adjustments §!eensesAre (-l

Uncolleclible Dererral

Cumulative Deferral

Interest Rollover

Dererral Cumulative

Monthly Balance

Interest Rate Interest

1 Actual Apr-16 $ 965,831 ' 829,827 $ {233,733) $ {97,729) $ {6,163,790) ' (3,645,882) $ (3,616,978) 0.42% $ (1,266) 2 Actual May-18 ' 878,143 $ 734,285 $ (233,627) $ {89,769) $ {6,253,559) ' {3,698,980) $ (3,672,431) 0.41% $ (1,255) 3 Actual Jun-16 $ 1,117,023 ' 1,002,370 ' $ 114,653 $ {6,138,906) $ (3,631,163) $ (3,665,071) 0.41% $ (1,240) 4 Actual Jul-16 ' 1,459,105 ' 1,306,307 ' $ 152,798 $ {5,986,108) $ (3,540,783) $ (3,585,973) 0.36% $ (1,076) 5 Actual Aug-16 $ 1,710,857 $ 1,689,284 $ $ 21,574 $ {5,974,142) $ {9,608) $ (3,533,705) $ {3,537,244) 0.33% $ (973) 6 Actual Sep-16 $ 1,674,393 $ 4,007,357 $ $ (2,332,964) $ (8,307,106) $ {4,913,653) $ {4,223,679) 0.23% $ (810) 7 Actual Oct-16 ' 688,799 ' 870,565 ' $ (181,766) $ (8,488,872) ' (5,021,168) $ {4,967,410) 027% $ {1,118) 8 Actual Nov-16 $ 912,862 $ 14,095,111 $ 6,753,135 $ $ (6,429,114) $ (14,917,968) $ (8,823,989) $ (6,922,578) 0.26% $ (1,500) 9 Actual Dec-16 ' 1,021,719 ' (965,687) $ $ 1,987,406 $ (12,930,580) $ {7,648,438) $ (8,236,213) 0.32% $ (2,607) 10 Actual Jan-17 $ 1,133,327 $ 3,951,756 $ $ (2,818,429) $ (15,749,009} $ {9,315,539) $ {8,481,988) 0.41% $ (2,488) 11 Actual Feb-17 $ 1,053,012 $ (56,750) $ ' 1,109,761 ' (14,639,248) $ (8,659,115) $ (8,987,327) 0.86% $ (6,441) 12 Actual Mar-17 $ 954,240 $ (3,075,239) $ $ 4,029,479 $ (10,609,768) $ {6,275,678) $ (7,467,396) 0.50% $ {3,111) 13 14 Total Interest Aug2016-Mar2017 $ {19,04Z) $ {19,047) 15 Total Over/{Under) Recovered Balance at April 1, 2017 >>>>>>>>>>>>>>>>>>>>>>>> $ 1101628,8151

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30

40

50

60

Atlantic City Electric Company Settlement Schedule 3 Amortization of Under Recovered UNC Balances Page 3of4 Amortization for Period July 2012 to May 2016 Amortfzallon Rate to be Effective For Period July 2012. May 2016 Updated for Actuats through March 2017

Line 1 Total Under Recovered LINC Balance $ 10,977,980 Settlement ER12020173 Schedule 3 Page 3 of 4 2 3 Interest Rate (Pre.Tax) 0.92% Settlement ER12020173 Schedule 3 Page 3 of 4 4 Interest Rate (After·Tax) 0.55% Settlement ER12020173 Schedule 3 Page 3 of 4 5 Amortization Period (Years) 3.9 Settlement ER12020173 Schedule 3 Page 3 of 4 6 7 Amortization 8 LINC Annual Balance Per Year ' 2,802,888 Settlement ER12020173 Schedule 3 Page 3 of 4 9 Column Totals $ 10,977,980 $ 117,227

Co!. 1 Co!.2 To ~ Col.4 Col.5 11 12 Total Total Monthly Total Total 13 Period Month Starting Balance Amortization Interest Ending Balance 14 Deferral Starting Balance $ 10,977,980 15 1 Jul-12 ' 10,977,980 $ 233,574 $ 4,935 $ 10,744,406 16 2 Aug-12 ' 10,744,406 $ 233,574 $ 4,829 $ 10,510,832 17 3 Sep-12 ' 10,510,632 ' 233,574 $ 4,723 $ 10,277,258 18 4 Oct-12 ' 10,277,258 $ 233,574 $ 4,617 $ 10,043,683 19 5 Nov-12 $ 10,043,683 $ 233,574 $ 4,511 $ 9,810,109

6 Dec-12 $ 9,810,109 $ 233,574 $ ·4,405 $ 9,576,535 21 7 Jan-13 ' 9,576,535 $ 233,574 $ 4,298 $ 9,342,961 22 8 Feb-13 ' 9,342,961 $ 233,574 $ 4,192 $ 9,109,387 23 9 Mar-13 $ 9,109,387 $ 233,574 $ 4,086 $ 8,875,813 24 10 Apr-13 ' 6,875,813 $ 233,574 $ 3,980 $ 8,642,239 25 11 May-13 ' 8,642,239 $ 233,574 $ 3,874 $ 8,408,665 26 12 Jun-13 ' 8,408,665 $ 233,574 $ 3,768 $ 8,175,091 27 13 Jul-13 ' 8,175,091 $ 233,574 $ 3,662 $ 7,941,517 28 14 Aug-13 ' 7,941,517 $ 233,574 $ 3,556 $ 7,707,943 29 15 Sep-13 $ 7,707,943 $ 233,574 $ 3,449 $ 7,474,369

16 Oct-13 $ 7,474,369 $ 233,574 $ 3,343 $ 7,240,795 31 17 Nov-13 $ 7,240,795 $ 233,574 $ 3,237 $ 7,007,221 32 18 Dec-13 $ 7,007,221 $ 233,574 $ 3,131 $ 6,773,647 33 19 Jan-14 $ 6,773,647 $ 233,574 $ 3,025 $ 6,540,073 34 20 Feb-14 ' 6,540,073 $ 233,574 ' 2,919 $ 6,306,499 35 21 Mar-14 ' 6,306,499 $ 233,574 $ 2,813 $ 6,072,925 36 22 Apr-14 $ 6,072,925 $ 233,574 $ 2,706 $ 5,839,351 37 23 May-14 $ 5,839,351 $ 233,574 $ 2,600 ' 5,605,777 38 24 Jun-14 $ 5,605,777 $ ~233,574 ' 2,494 ' 5,372,203 39 25 Jut-14 $ 5,372,203 $ 233,574 $ 2,388 $ 5,138,629

26 Aug-14 $ 5,138,629 ' 233,574 $ 2,262 $ 4,905,055 41 27 Sep-14 $ 4,905,055 $ 233,574 $ 2,176 ' 4,671,461 42 28 Oc\.14 $ 4,671,461 $ 233,574 ' 2,070 ' 4,437,907 43 29 Nov-14 $ 4,437,907 $ 233,574 $ 1,964 ' 4,204,333 44 30 Dec-14 $ 4,204,333 ' 233,574 $ 1,657 ' 3,970,759 45 31 Jan-15 $ 3,970,759 $ 233,574 $ 1,751 ' 3,737,185 46 32 Feb-15 .$ 3,737,165 ' 233,574 $ 1,645 ' 3,503,611 47 33 Mar•15 $ 3,503,611 $ 233,574 ' 1,539 $ 3,270,036 48 34 Apr·15 $ 3,270,036 $ 233,574 $ 1,433 $ 3,036,462 49 35 May-15 $ 3,036,462 $ 233,574 $ 1,327 $ 2,802,866

36 Jun-15 $ 2,802,866 $ 233,574 $ 1,221 $ 2,569,314 51 37 Jul-15 $ 2,569,314 ' 233,574 $ 1,114 $ 2,335,740 52 38 Aug-15 $ 2,335,740 $ 233,574 ' 1,008 ' 2,102,166 53 54

39 40

Sep-15 Oct-15

2,102,166 1,868,592 ' $ 233,574 $ 233,574 ' $ 902 $ 796 ' '

1,868,592 1,635,018

55 41 Nov•15 $ 1,635,018 $ 233,574 ' 690 $ 1,401,444 56 42 Dec-15 $ 1,401,444 $ 233,574 $ 564 ' 1,167,870 57 43 Jan-16 $ 1,167,870 $ 233,574 $ 478 $ 934,296 58 44 Feb-16 $ 934,296 $ 233,574 ' 371 $ 700,722 59 45 Mar-16 $ 700,722 $ 233,574 ' 265 $ 467,148 46 Apr-16 ' 467,148 $ 233,574 ' 159 $ 233,574 61 47 May-16 ' 233,574 $ 233,574 $ 53 $ 0 62 48 Jun-16 $ 0 $ $ 0 $ 0

Notes: 1) Monthly Amortizations= Amortization Balance Per Year/ 12 Months 2) Interest= Average Monthly Balance• Interest Rate Per Month

Average Monthly Balance= (Prior Month Balance+ Current Month Balance)/ 2 Interest Rate Per Month= Interest Rate (After Tax)/ 12 months

Atlantic City Electric Company Settlement Schedule 3 Uncollectible Charge Rate Design ~ Page4of4 Rates Effective For Period June 2017 -May 2018 Updated for Actuals through March 2017

Forecasted Uncollectible Expense

Line No. Month Uncollectible Ex~ense 1 2 Apr-17 $ (1,495,265) • •Represents Expenses for April and May 17 minus projected retail revenue to be collected in current rates. 3 May-17 $ (1,165,717) • 4 Jun-17 $ 3,204,245 5 Jul-17 $ 7,102,801 6 Aug-17 $ 5,412,183 7 Sep-17 $ (75,508) 8 Oct-17 $ (4,615,168) 9 Nov-17 $ (1,517,722) 10 Dec-17 $ 3,317,410 11 Jan-18 $ 8,746,918 12 Feb-18 $ (3,058,810) 13 Mar-18 $ 1,584,029 14 15 Total Period $17,439,396

Settle1nent

Schedule 4

AUantic City Electric Company Setuement Schedule 4 Estimated Impact of Proposed Rate Changes Page1of4 Rates Effective For Period June 2017 - May 2018 Updated for Actuals through March 2017

Present Rates {Effective Date: Jan. 1, 2017} ProI!osed Rates

Annualized Sales Annualized @Customer overall Rate Overall Revenue

Rate Class jkWh! NGC ~ Clean Energi Uncoltectib!e NGC Clean Ener!l)'. Uncollectible Chan9e NGC Clean Ener!l)'. Uncollectible Change RS 4,171,964,933 $0.016116 $ 0.003894 $ 0.001652 $ 0.011291 $ 0.003352 $ 0.003400 $ (0.003619) $ (20,129,731) $ (2,261,205) $ 7,292,595 $ (15,098,341) MGS Secondary 1, 152,950.462 $0.016116 $ 0.003894 $ 0.001652 $ 0.011291 $ 0.003352 $ 0.003400 $ (0.003619) $ (5,562,986) $ (624,899) $ 2,015,357 $ (4,172,528) MGS Primary 24,456,016 $0.015694 $ 0.003894 $ 0.001652 $ 0.010996 $ 0.003352 $ 0.003400 $ (0.003492) $ (114,894) $ (13,255) $ 42,749 $ (85.400) AGS Secondary AGS Primary

1,917.585,029 571,955,641

$0.016116 $0.015694

$ 0.003894 $ 0.003894

$ 0.001652 $ 0.001652

$ $

0.011291 0.010996

$ $

0.003352 0.003352

$ 0.003400 $ 0.003400

$ $

(0.003619) (0.003492)

$ $·

(9,252,348) (2,687,048)

$ $

(1,039,331) (310,000)

$ 3,351,939 $ 999,778

$ $

(6,939.740) (1,997,269)

TGS 920,786,585 $0.015364 $ 0.003894 $ 0.001652 $ 0.010765 $ 0.003352 $ 0.003400 $ (0.003393) $ (4,234,698) $ (499,066) $ 1,609,535 $ (3,124,229) SPUCSL 73,240,385 $0.016116 $ 0.003894 $ 0.001652 $ 0.011291 $ 0.003352 $ 0.003400 $ (0.003619) $ (353,385) $ (39,696) $ 128,024 $ (265,057) DOC 12,621,752 $0.016116 $ 0.003894 $ 0,001652 $ 0.011291 $ 0.003352 $ 0.003400 $ {0.003619) $ (60,900) $ (6,841} $ 22,063 $ (45,678! Total 8,845,560,805 $ (42,395,989) $ (4,794,294) $ 15,462,040 $ (31,728,243)

'

•

ATLANTIC CITY ELECTRIC COMPANY Settlement Schedule 4 RESIDENTIAL SERVICE l"RS"l Page 2 of 4

8 WINTER MONTHS (October Through May)

Present Rates vs.

Proposed Rates with NGC/SBC Adjustments Effective June 01, 2017

Monthly Present Present Present New New New Difference Total Usage

"···" Delivery., Supply+T1$) Total.., Delivery ,. Supply+T ~ Total ,., Delivery . Supply+T 1$\ rnffi~$1""" ·-

0 $ 4.44 $ - $ 4.44 $ 4.44 $ - $ 4.44 $ - $ - $ - 0.00% 25 $ 6.40 $ 2.68 $ 9.08 $ 6.31 $ 2.68 $ 8.99 $ (0.09) $ - $ (0.09) -0.99% 50 $ 8.37 $ 5.36 $ 13.73 $ 8.19 $ 5.36 $ 13.55 $ (0.18) $ - $ (0.18) -1.31% 75 $ 10.33 $ 8.04 $ 18.37 $ 10.06 $ 8.04 $ 18.10 $ (0.27) $ - $ (0.27) -1.47% 100 $ 12.30 $ 10.72 $ 23.02 $ 11.93 $ 10.72 $ 22.65 $ (0.37) $ - $ (0.37) -1.61% 150 $ 16.22 $ 16.08 $ 32.30 $ 15.68 $ 16.08 $ 31.76 $ (0.54) $ - $ (0.54) -1.67% 200 $ 20.15 $ 21.44 $ 41.59 . $ 19.43 $ 21.44 $ 40.87 $ (0.72) $ - $ (0.72) -1.73% 250 $ 24.08 $ 26.80 $ 50.88 $ 23.17 $ 26.80 $ 49.97 $ (0.91) $ - $ (0.91) -1.79% 300 $ 28.01 $ 32.15 $ 60.16 $ 26.92 $ 32.15 $ 59.07 $ (1.09) $ - $ (1.09) -1.81% 350 $ 31.93 $ 37.51 $ 69.44 $ • 30.67 $ 37.51 $ 68.18 $ (1.26) $ - $ (1.26) -1.81% 400 $ 35.86 $ 42.87 $ 78.73 $ 34.42 $ 42.87 $ 77.29 $ (1.44) $ - $ (1.44) -1.83% 450 $ 39.79 $ 48.23 $ 88.02 $ 38.16 $ 48.23 $ 86.39 $ (1.63) $ - $ (1.63) -1.85% 500 $ 43.72 $ 53.59 $ 97.31 $ 41.91 $ 53.59 $ 95.50 $ (1.81) $ - $ (1.81) -1.86% 600 $ 51.57 $ 64.31 $ 115.88 $ 49.40 $ 64.31 $ 113.71 $ (2.17) $ - $ (2.17) -1.87% 700 $ 59.43 $ 75.03 $ 134.46 $ 56.90 $ 75.03 $ 131.93 $ (2.53) $ - $ (2.53) -1.88% 716 $ 60.69 $ 76.74 $ 137.43 $ 58.10 $ 76.74 $ 134.84 $ (2.59) $ - $ (2.59) -1.88% 750 $ 63.36 $ 80.39 $ 143.75 $ 60.64 $ 80.39 $ 141.03 $ (2.72) $ - $ (2.72) -1.89% 800 $ 67.29 $ 85.75 $ 153.04 $ 64.39 $ 85.75 $ 150.14 $ (2.90) $ - $ (2.90) -1.89% 900 $ 75. 14 $ 96.46 $ 171.60 $ 71.88 $ 96.46 $ 168.34 $ (3.26) $ - $ (3.26) -1.90% 1000 $ 83.00 $ 107.18 $ 190.18 $ 79.38 $ 107.18 $ 186.56 $ (3.62) $ - $ (3.62) -1.90% 1200 $ 98.71 $ 128.62 $ 227.33 $ 94.37 $ 128.62 $ 222.99 $ (4.34) $ - $ (4.34) -1.91% 1500 $ 122.28 $ 160.77 $ 283.05 $ 116.85 $ 160.77 $ 277.62 $ (5.43) $ - $ (5.43) -1.92% 2000 $ 161.55 $ 214.36 $ 375.91 $ 154.32 $ 214.36 $ 368.68 $ (7.23) $ - $ (7.23) -1.92% 2500 $ 200.83 $ 267.96 $ 468.79 $ 191.79 $ 267.96 $ 459.75 $ (9.04) $ - $ (9.04) -1.93% 3000 $ 240.11 $ 321.55 $ 561.66 $ 229.25 $ 321.55 $ 550.80 $ (10.86) $ - $ (10.86) -1.93% 3500 $ 279.39 $ 375.14 $ 654.53 $ 266.72 $ 375.14 $ 641.86 $ (12.67) $ - $ (12.67) -1.94% 4000 $ 318.67 $ 428.73 $ 747.40 $ 304.19 $ 428.73 $ 732.92 $ '14.48) $ - $ i14.48\ -1.94%

Settlement Schedule 4 ATLANTIC CITY ELECTRIC COMPANY Page 3 of 4

RESIDENTIAL SERVICE C"RS"l 4 SUMMER MONTHS (June Through September)

Present Rates vs.

Proposed Rates with NGC/SBC Adjustments Effective June 01, 2017

Monthly Present Present Present New New New Difference Total Usage Delivery Supply+T Total Delivery Supply+T Total Delivery Supply+T Difference ...... . 1$' . . 1$1 . . 1$1 . ' . .

0 $ 4.44 $ . $ 4.44 $ 4.44 $ . $ 4.44 $ . $ . $ . 0.00% 25 $ 6.50 $ 2.53 $ 9.03 $ 6.41 $ 2.53 $ 8.94 $ (0.09) $ . $ (0.09) -1.00% 50 $ 8.56 $ 5.05 $ 13.61 $ 8.38 $ 5.05 $ 13.43 $ (0.18) $ . $ (0.18) -1.32% 75 $ 10.62 $ 7.58 $ 18.20 $ 10.35 $ 7.58 $ 17.93 $ (0.27) $ . $ (0.27) -1.48%

100 $ 12.68 $ 10.10 $ 22.78 $ 12.32 $ 10.10 $ 22.42 $ (0.36) $ . $ (0.36) -1.58% 150 $ 16.81 $ 15.16 $ 31.97 $ • 16.26 $ 15.16 $ 31.42 $ (0.55) $ . $ (0.55) -1.72% 200 $ 20.93 $ 20.21 $ 41.14 $ 20.20 $ 20.21 $ 40.41 $ (0.73) $ . $ (0.73) -1.77% 250 $ 25.05 $ 25.26 $ 50.31 $ 24.15 $ 25.26 $ 49.41 $ (0.90) $ . $ (0.90) -1.79% 300 $ 29.17 $ 30.31 $ 59.48 $ 28.09 $ 30.31 $ 58.40 $ (1.08) $ . $ (1.08) -1.82% 350 $ 33.29 $ 35.37 $ 68.66 $ 32.03 $ 35.37 $ 67.40 $ (1.26) $ . $ (1.26) -1.84% 400 $ 37.42 $ 40.42 $ 77.84 $ 35.97 $ 40.42 $ 76.39 $ (1.45) $ . $ (1.45) -1.86% 450 $ 41.54 $ 45.47 $ 87.01 $ 39.91 $ 45.47 $ 85.38 $ (1.63) $ . $ (1.63) -1.87% 500 $ 45.66 $ 50.52 $ 96.18 $ 43.85 $ 50.52 $ 94.37 $ (1.81) $ . $ (1.81) -1.88% 600 $ 53.90 $ 60.63 $ 114.53 $ 51.73 $ 60.63 $ 112.36 $ (2.17) $ . $ (2.17) -1.89% 700 $ 62.15 $ 70.73 $ 132.88 $ 59.62 $ 70.73 $ 130.35 $ (2.53) $ . $ (2.53) -1.90% 716 $ 63.47 $ 72.35 $ 135.82 $ 60.88 $ 72.35 $ 133.23 $ (2.59) $ . $ (2.59) -1.91% 750 $ 66.27 $ 75.78 $ 142.05 $ 63.56 $ 75.78 $ 139.34 $ (2.71) $ . $ (2.71) -1.91% 800 $ 70.77 $ 81.33 $ 152.10 $ 67.87 $ 81.33 $ 149.20 $ (2.90) $ . $ (2.90) -1.91% 900 $ 79.76 $ 92.42 $ 172.18 $ 76.51 $ 92.42 $ 168.93 $ (3.25) $ . $ (3.25) -1.89% 1000 $ 88.76 $ 103.52 $ 192.28 $ 85.14 $ 103.52 $ 188.66 $ (3.62) $ . $ (3.62) -1.88% 1200 $ 106.75 $ 125.70 $ 232.45 $ 102.41 $ 125.70 $ 228.11 $ (4.34) $ . $ (4.34) -1.87% 1500 $ 133.74 $ 158.98 $ 292.72 $ 128.31 $ 158.98 $ 287.29 $ (5.43) $ . $ (5.43) -1.86% 2000 $ 178.72 $ 214.45 $ 393.17 $ 171.48 $ 214.45 $ 385.93 $ (7.24) $ . $ (7.24) -1.84% 2500 $ 223.70 $ 269.92 $ 493.62 $ 214.65 $ 269.92 $ 484.57 $ (9.05) $ . $ (9.05) -1.83% 3000 $ 268.68 $ 325.38 $ 594.06 $ 257.82 $ 325.38 $ 583.20 $ (10.86) $ . $ (10.86) -1.83% 3500 $ 313.66 $ 380.85 $ 694.51 $ 300.99 $ 380.85 $ 681.84 $ (12.67) $ . $ (12.67) -1.82% 4000 $ 358.64 $ 436.32 $ 794.96 $ 344.16 $ 436.32 $ 780.48 $ 114.481 $ . $ 114.481 -1.82%

Settlement Schedule 4 ATLANTIC CITY ELECTRIC COMPANY Page4of4

RESIDENTIAL SERVICE l"RS"l Annual Average

Present Rates vs.

Proposed Rates with NGC/SBC Adjustments Effective June 01, 2017

Monthly Present Present Present New New New Difference Total Usage ,......

Delivery ,.,

Supply+T ($:

Total . Delivery . Supply+T

1$1 Total .

Delivery .

Supply+T l$i . Difft ··- ' . .

0 $ 4.44 $ - $ 4.44 $ 4.44 $ . $ 4.44 $ - $ - $ - 0.00% 25 $ 6.43 $ 2.63 $ 9.06 $ • 6.34 $ 2.63 $ 8.97 $ (0.09) $ . $ (0.09) -0.99% 50 $ 8.43 $ 5.26 $ 13.69 $ 8.25 $ 5.26 $ 13.51 $ (0.18) $ - $ (0.18) -1.31% 75 $ 10.43 $ 7.89 $ 18.32 $ 10.16 $ 7.89 $ 18.05 $ (0.27) $ - $ (0.27) -1.47%

100 $ 12.43 $ 10.51 $ 22.94 $ 12.06 $ 10.51 $ 22.57 $ (0.37) $ - $ (0.37) -1.61% 150 $ 16.42 $ 15.77 $ 32.19 $ 15.87 $ 15.77 $ 31.64 $ (0.55) $ - $ (0.55) -1.71% 200 $ 20.41 $ 21.03 $ 41.44 $ 19.69 $ 21.03 $ 40.72 $ {0.72) $ . $ (0.72) -1.74% 250 $ 24.40 $ 26.29 $ 50.69 $ 23.50 $ 26.29 $ 49.79 $ (0.90) $ . $ (0.90) -1.78% 300 $ 28.40 $ 31.54 $ 59.94 $ 27.31 $ 31.54 $ 58.85 $ (1.09) $ - $ (1.09) -1.82% 350 $ 32.38 $ 36.80 $ 69.18 $ 31.12 $ 36.80 $ 67.92 $ (1.26) $ . $ (1.26) -1.82% 400 $ 36.38 $ 42.05 $ 78.43 $ 34.94 $ 42.05 $ 76.99 $ (1.44) $ - $ (1.44) -1.84% 450 $ 40.37 $ 47.31 $ 87.68 $ 38.74 $ 47.31 $ 86.05 $ (1.63) $ - $ (1.63) -1.86% 500 $ 44.37 $ 52.57 $ 96.94 $ 42.56 $ 52.57 $ 95.13 $ (1.81) $ . $ (1.81) -1.87% 600 $ 52.35 $ 63.08 $ 115.43 $ 50.18 $ 63.08 $ 113.26 $ (2.17) $ . $ (2.17) -1.88% 700 $ 60.34 $ 73.60 $ 133.94 $ 57.81 $ 73.60 $ 131.41 $ (2.53) $ . $ (2.53) -1.89% 716 $ 61.62 $ 75.28 $ 136.90 $ 59.03 $ 75.28 $ 134.31 $ (2.59) $ . $ (2.59) -1.89% 750 $ 64.33 $ 78.85 $ 143.18 $ 61.61 $ 78.85 $ 140.46 $ (2.72) $ . $ (2.72) -1.90% 800 $ 68.45 $ 84.28 $ 152.73 $ 65.55 $ 84.28 $ 149.83 $ (2.90) $ - $ (2.90) -1.90% 900 $ 76.68 $ 95.11 $ 171.79 $ 73.42 $ 95.11 $ 168.53 $ (3.26) $ . $ (3.26) -1.90% 1000 $ 84.92 $ 105.96 $ 190.88 $ 81.30 $ 105.96 $ 187.26 $ (3.62) $ . $ (3.62) -1.90% 1200 $ 101.39 $ 127.65 $ 229.04 $ 97.05 $ 127.65 $ 224.70 $ (4.34) $ - $ (4.34) -1.89% 1500 $ 126.10 $ 160.17 $ 286.27 $ 120.67 $ 160.17 $ 280.84 $ (5.43) $ . $ (5.43) -1.90% 2000 $ 167.27 $ 214.39 $ 381.66 $ 160.04 $ 214.39 $ 374.43 $ (7.23) $ . $ (7.23) -1.69% 2500 $ 208.45 $ 268.61 $ 477.06 $ 199.41 $ 268.61 $ 468.02 $ (9.04) $ . $ (9.04) -1.89% 3000 $ 249.63 $ 322.83 $ 572.46 $ 238.77 $ 322.83 $ 561.60 $ (10.86) $ - $ (10.86) -1.90% 3500 $ 290.81 $ 377.04 $ 667.85 $ 278.14 $ 377.04 $ · 655.18 $ (12.67) $ . $ (12.67) -1.90% 4000 $ 331.99 $ 431.26 $ 763.25 $ 317.51 $ 431.26 $ 748.77 $ /14.48\ $ - $ 114.48\ -1.90%

Settletnent

Schedule 5

Settlement Schedule 5 Page 1 of 2

ATLANTIC CITY ELECTRIC COMi>ANY BPU NJ No. 11 Electric Service - Section IV Revised Sheet Replaces Revised Sheet No. 57

Rider (NGC) Non-Utility Generation Charge (NGC)

Customers receiving service under Electric Rate Schedules RS, MGS, AGS, TS, TGS, DDC, SPL, CSL, STB, SPP are subject to a non-bypassable Non-Utility Generation Charge (NGC).

This charge provided for the full and timely recovery of the following costs:

1. Costs associated with the utility's purchase power contracts with non-utility generators and to recover the stranded costs associated with such commitments. The costs recovered via the NGC are based on the difference between the average estimated cost of energy and capacity in the regional market and the associated costs provided in existing power purchase contracts with non-utility generators. Differences between actual and estimated costs occurring under previously approved rates shall be added or subtracted as appropriate to the estimated costs.

2. Costs associated with the transition to a competitive electric market and the restructuring of the electric utility industry in the State of New Jersey.

3. Costs associated with the Company's generation facilities net of any revenue received from the sale of energy, capacity and ancillary services associated with these units.

The following table provides the component rates of the NGC charge for each rate schedule based on the cost categories listed above in $ per kWh.

Non-Utility St. Lawrence Generation

NYPA Credit (effective above Rate Schedule through May 31, 2017) market costs Total NGC

RS*

RS ($0.000064) $ 0.011291 $ 0.011227

MGS Secondary $ 0.011291 . $ 0.011291

MGS Primary $ 0.010996 $ 0.010996

AGS Secondary $ 0.011291 $ 0.011291

AGS Primary $ 0.010996 $ 0.010996 ~

TGS $ 0.010765 $ 0.010765

SPUCSL $ 0.011291 $ 0.011291 DDC $ 0.011291 $ 0.011291

*The St. Lawrence New York Power Authority (NYPA) Annual Benefit Allocation credit reflects the annual Economic Benefit Allocation for New Jersey's investor owned utilities to supply residential customers' load. The NYPA credit amount is adjusted annually, on June 1 of each year, to reflect the amount of the credit received.

Date of Issue: Effective Date:

Issued by:

Settlement Schedule 5 Page 2 of2

ATLANTIC CITY ELECTRIC COMPANY BPU NJ No. 11 Electric Service - Section IV Revised Sheet Replaces Revised Sheet No. 58

RIDER (SBC) Societal Benefits Charge (SBC)

Customers receiving service under Electric Rate Schedules RS, MGS, AGS, TS, TGS, DDC, SPL, and CSL and any customer taking service under special contractual arrangements.

In accordance with the New Jersey Electric Discount and Energy Competition Act, Societal Benefits Charges include:

• Clean Energy Program Costs • Uncollectible Accounts • Universal Service Fund • Lifeline

The Company's Societal Benefits Charges to be effective on and after the date indicated below are as follows:

Clean Energy Program $0.003352 per kWh Uncollectible Accounts $0.003400 per kWh Universal Service Fund $0.001990 per kWh Lifeline $0.000777 per kWh

Date of Issue: Effective Date:

Issued by:

Settlement Schedule 5 Page 1..Qf.3

ATLANTIC CITY ELECTRIC COMPANY BPU NJ No. 11 Electrlc Service - Section IV l"'.auReenth Revised Sheet Replaces Thirteenth Revised Sheet No. 57

Rider (NGC) N~n-Utility Generation Charge (NGC)

Customers receiving service under Electric Rate Schedules RS, MGS, AGS, TS, TGS, DDC, SPL, CSL, STB, SPP are subject to a non-bypassable Non-Utility Generation Charge (NGC).

This charge provided for the full and timely recovery of the following costs:

1. Costs associated with the utility's purchase power contracts with non-utility generators and to recover the stranded costs associated with such commitments. The costs recovered via the NGC are based on the difference between the average estimated cost of energy and capacity in the regional market and the associated costs provided in existing power purchase contracts with non-utility generators. Differences between actual and estimated costs occurring under previously approved rates shall be added or subtracted as appropriate to the est[mated costs.

2. Costs associated with the transition to a competitive electric market and the restructuring of the electric utility industry in the State of New Jersey.

3. Costs associated with the Company's generation facilities net of any revenue received from the sale of energy, capacity and ancillary services associated with these units.

The following table provides the component rates of the NGC charge for each rate schedule based on the cost categories listed above in $ per kWh.

Non-Utility St. Lawrence .Generation

NYPA Credit (effective above Rate Schedule through May 31, 2017) market costs Total NGC

RS' RS ($0.000064) $ 0.G4S446011291 $0.~11227

MGS Secondary $ 0.Q41!446011291 $ 0.Q41!446011291 MG.s Primary $ o.~10996 $ 0.-010996

AGS Secondary $ 0.G4S446011291 $ 0.Q41!446011291 AGS Primary $0.~10996 $0.-010996

TGS $ 0.-10765 $ 0.-010765 SPUCSL $ o.~11291 $ 0.Q41!446011291

DDC $ 0.G4S446011291 $ 0.Q41!446011291

*The St. Lawrence New York Power Authority (NYPA) Annual Benefit Allocation credit reflects the annual Economic Benefit Allocation for New Jersey's investor owned utilities to supply residential customers' load. The NYPA credit amount is adjusted annually, on June 1 of each year, to reflect the amount of the credit received.

Date of Issue: Oesember 8, 201& Effective Date: Janua~· 1, 2017

IHued by· Danid M. Velaquez, PFHident and Chief Exesuti•1e Qfflser MlantiG City lilastriG Campany i:llad puFSuant ta ioard of PubliG Utilities gf the 5tata of Nam JeFHY dira;tiues aHaGiatad mlth the BPU Dg;ket Nos, ER1&1110&4 and ER1&0200&9

Settlement Schedule 5 Page 2.Qf.3

Issued by: - Formatted: Don't hyphenate, Border: Top:

(Single so!!d IJne, Auto, 0.5 pt Line width), Tab stops: O", Left+ 0.31", Left+ 4.5", Left+ 6.6", Left

Settlement Schedule 5 Page 3..Qf..3

ATLANTIC CITY ELECTRIC COMPANY BPU NJ No. 11 Electric Service - Section IV 1),\•en~• Seuenth Revised Sheet Replaces +maR~• SIHh Revised Sheet No. 58

RIDER(SBC) Societal Benefits Charge (SBC)

Customers receiving service under Electric Rate Schedules RS, MGS, AGS, TS, TGS, DDC, SPL, and CSL and any customer taking service under special contractual arrangements.

ln accordance with the New Jersey Electric Discount and Energy Competition Act, Societal Benefits Charges include:

Clean Energy Program Costs

Uncoltectible Accounts

• Universal Service Fund

Lifeline

The Company's Societal Benefits Charges to be effective on and after the date indicated below are as follows:

Clean Energy Program $0.GG3884003352 per kWh Uncollectible Accounts $0.-003400 per kWh Universal Service Fund $0.001990 per kWh Lifeline $0.000777 per kWh

Date of Issue: geGember 8, 201& Effective Date: Jam,ar:y 1, 2017

IB&uad by· Cavld M, \4>Iazquez, President and'Chlaf Exacuti\•e Officer Atlantic City Electric Company Filed pursuaRt to ioaFd of Public Utilities of the State of New Jersey directi1;as associated with the BPU llookot Nos liR1&1110&4 an~ iR1&0a0099 Formatted: Don't hyphenate, Tab stops: 0", Issued by: Left+ 0.31", Left+ 0.69", Left+ 5", Left+

6.6", Left

I/MIO the Petition ofAtlantic City Electric Company to Reconcile and Update the Level oflts Non-Utility Generation Charge and Its Societal Benefits Charge (2017)

BPU Irene Kim Asbury, Esquire Secretary of the Board Board ofPublic Utilities 44 South Clinton Avenue, Suite 314 P.O. Box350 Trenton, NJ 08625-0350 (609) 777-3300 -Telephone irene.asbury@bpu.nj.gov board.secretary@bpu.nj.gov

Thomas Walker Director, Division ofEnergy Board ofPublic Utilities 44 South Clinton Avenue, Suite 314 P.O. Box350 Trenton, NJ 08625-0350 thomas.walker@bpu.nj.gov

Bethany Rocque-Romaine, Esquire Legal Specialist New Jersey Board ofPublic Utilities 44 South Clinton Avenue, Suite 314 Trenton, NJ 08625-0350 bethany.romaine@bpu.nj.gov

Andrea Reid Board of Public Utilities 44 South Clinton Avenue, Suite 314 P.O.Box350 Trenton, NJ 08625-0350 andrea.reid@bpu.nj.gov

John Zarzycki Board ofPublic Utilities 44 South Clinton Avenue, Suite 314 P.O. Box 350 Trenton, NJ 08625-0350 john.zarzycki@bpu.nj.gov ?

Stacy Peterson Division ofEnergy Board ofPublic Utilities 44 South Clinton Avenue, Suite 314 P.O. Box350 Trenton, NJ 08625-0350 stacy.peterson@bpu.nj.gov

DAG Alex Moreau, Esquire Deputy Attorney General Department of Law and Public Safety Division of Law 124 Halsey Street P.0. Box 45029 Newark, NJ 07101 alex.moreau@dol.lps.state.nj.us

BPU Docket No. ERi7020091 Service List

Veronica Beke, Esquire Deputy Attorney General Department ofLaw and Public Safety Division ofLaw P.0. Box 45029 Newark, NJ 07101-8029 veronica.beke@dol.lps.state.nj.us

Geoffrey Gersten, Esquire Deputy Attorney General Department ofLaw and Public Safety Division of Law 124 Halsey Street P.O. Box 45029 Newark, NJ 07101 geoffrey.gersten@dol.lps.state.nj.us

RATE COUNSEL Stefanie A. Brand, Esquire Director Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box003 Trenton, NJ 08625 sbrand@rpa.state.nj.us

Brian 0. Lipman, Esquire Division ofRate Counsel 140 East Front Street, 4th Floor P.O. Box003 Trenton, NJ 08625 blipman@rpa.state.nj.us

Ami Morita, Esquire Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box003 Trenton, NJ 08625-0003 amorita@rpa.state.nj.us

Diane Schulze, Esquire Division ofRate Counsel 140 East Front Street, 4th Floor P.O.Box003 Trenton, NJ 08625-0003 dschulze@rpa.state.nj.us

James Glassen, Esquire Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box003 Trenton, NJ 08625-0003 jglassen@rpa.state.nj.us

LisaGurkas Division ofRate Counsel 140 East Front Street, 4th Floor P.O.Box003 Trenton, NJ 08625-0003 lgurkas@rpa.state.nj.us

RATE COUNSEL EXPERT Robert Henkes Henkes Consulting 7 Sunset Road Old Greenwich, CT 06870 rhenkes@optonline.net

ACE Philip J. Passanante, Esquire Associate General Counsel Atlantic City Electric Company 92DC42 500 N. Wakefield Drive P.O. Box 6066 Newark, DE 19714-6066 (302) 429-3105 - Telephone (302) 429-3801 -Facsimile philip.passanante@pepcoholdings.com

Nicholas W. Mattia, Jr., Esquire 5323 Benito Court Lakewood Ranch, FL3421 l (941) 756-0291-Telephone nwmattialaw@gmail.com

Roger E. Pedersen, Manager New Jersey Regulatory Affairs 63ML38 Atlantic City Electric Company 5100 Harding Highway Mays Landing, NJ 08330 (609) 625-5820 -Telephone (609) 625-5838-Facsimile roger.pedersen@pepcoholdings.com

Susan De Vito Manager Regulatory Compliance Pricing 79NC59 Pepco Holdings, Inc. 401 Eagle Run Road P.O. Box 9239 Newark, DE 19714-9239 susan.devito@pepcoholdings.com

mailto:susan.devito@pepcoholdings.commailto:roger.pedersen@pepcoholdings.commailto:nwmattialaw@gmail.commailto:philip.passanante@pepcoholdings.commailto:rhenkes@optonline.netmailto:lgurkas@rpa.state.nj.usmailto:jglassen@rpa.state.nj.usmailto:dschulze@rpa.state.nj.usmailto:amorita@rpa.state.nj.usmailto:blipman@rpa.state.nj.usmailto:sbrand@rpa.state.nj.usmailto:geoffrey.gersten@dol.lps.state.nj.usmailto:veronica.beke@dol.lps.state.nj.usmailto:alex.moreau@dol.lps.state.nj.usmailto:stacy.peterson@bpu.nj.govmailto:john.zarzycki@bpu.nj.govmailto:andrea.reid@bpu.nj.govmailto:bethany.romaine@bpu.nj.govmailto:thomas.walker@bpu.nj.govmailto:board.secretary@bpu.nj.govmailto:irene.asbury@bpu.nj.gov

Thomas M. Hahn Regulatory Affairs Lead 63ML38 Atlantic City Electric Company 5100 Harding Highway Mays Landing, NJ 08330 (609) 625-5853 -Telephone thomas.hahn@pepcoholdings.com

Julie Giese Director, Accounting 401 Eagle Run Road P.O. Box 9239 Newark, DE 19714-9239 julie.giese@bge.com

mailto:julie.giese@bge.commailto:thomas.hahn@pepcoholdings.com

Structure BookmarksAgenda Date: 05/31/17 Agenda Item: 2F STATE OF NEW JERSEY Board of Public Utilities 44 South Clinton Avenue, 3Floor, Suite 314 Post Office Box 350 Trenton, New Jersey 08625-0350 / rd www.nj.gov/bpu

ENERGY IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE ITS SOCIETAL BENEFITS CHARGE (2017) IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE ITS SOCIETAL BENEFITS CHARGE (2017) IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE ITS SOCIETAL BENEFITS CHARGE (2017) ) ) ) ) ) ORDER APPROVING PROVISIONAL RATES DOCKET NO. ER17020091

Parties of Record: · Parties of Record: ·

Philip J. Passanante, Esq., for the Atlantic City Electric Company Stefanie A. Brand, Esq., Director, New Jersey Division of Rate Counsel BY THE BOARD: By petition dated February 1, 2017, Atlantic City Electric Company ("ACE" or Company") filed a petition with the New Jersey Board of Public Utilities ("Board") requesting approval of changes in its Non-Utility Generation Charge ("NGC") and its Societal Benefits Charge ("SBC"). ("February 2017 Petition") By this Decision and Order, the Board considers a Stipulation for Provisional Rates ("Stipulation") entered into by ACE, the New Jersey Division of Rate Counsel ("Rate Counsel") and Board Staff ("Staff') (coBACKGROUND BACKGROUND As a result of the Board's Final Decision and Order issued in Docket Nos. EO97070455, EO97070456, and EO97090457 ("Restructuring Order"),the Company implemented unbundled rates that included a Market Transition Charge ("MTG"), a Net Non-Utility Generation Charge ("NNC"), and the SBC as rate components. The Restructuring Order also established the components of the SBC and the associated cost recovery mechanisms. 1

In re ACE-Rate Unbundling, Stranded Costs and Restructuring Filings, BPU Docket Nos. E097070455. E097070456, and EO97070457 (Final Decision and Order dated March 30, 2001.) 1

Agenda Date: 05/31 (17 Agenda Item: 2F Pursuant to the Restructuring Order, and to the extent that expenditures for these initiatives exceeded the amount of their allowed cost recovery, the expenditures were subject to deferred accounting treatment for future recovery at the close of the transition period. The Board further directed ACE to make a filing, no later than August 1, 2002, so the Board could consider the matter. By Order dated July 8, 2004,the Board finalized the Company's SBC, NNC, and MTG deferred cost components through the end of 2

By Order dated May 26, 2005,the Board approved a stipulation in ACE's 2003 base rate case, which adjusted and combined the NNC and MTG into the NGC, effective as of June 1, 2005. 3

COMPANY FILING COMPANY FILING On February 1, 2017 the Company filed the February 2017 Petition and accompanying exhibits, including pre-filed direct testimony. The Company's NGC is designed to recover the abovemarket component of payments made under purchased power agreements ("PPAs") with nonutility generators ("NUGs"). The SBC components proposed to be revised by the instant petition are the Clean Energy Program component ("CEP") and the Uncollectible Accounts component ("UNG"). In the February 2017 Petition, the projected deferred NGC With respect to the NGC, the rate proposed in the March Update was designed to recover forecasted above-market NUG costs for the period April 1, 2017 through March 31, 2018, totaling $91.323 million. According to the Company, approval of the proposed rate would also recover the projected under-recovered balance of $1.288 million as of April 1, 2017. ·Based on the March Update, the net forecasted recovery for this period is $92.611 million, which is a decrease of approximately $42.396 million from what is cuIn re the Petition of Atlantic City Electric Company d/b/a Conectiv Power Delivery for Approval of Amendments to its Tariff to Provide for an Increase in Rates for Electric Service, BPU Docket No. ER02080510 (Final Order dated July 8, 2004.)In re the Petition of Atlantic City Electric Company d/b/a Conectiv Power Delivery for Approval of Amendments to its Tariff to Provide for an Increase in Rates for Electric Service-Phase I and Phase II ,and In re the Petition of Atlantic City Electric Company d/b/a Conec2 3

Agenda Date_; 05/31/17 Agenda Item: 2F

SBC (UNC AND CEP) SBC (UNC AND CEP) According to the March Update, the rates proposed for the UNG component of the SBC were designed to recover approximately $17.439 million for the period April 1, 2017 through March 31, 2018. Additionally, the proposed rate would recover from customers a projected underrecovered balance of $10.629 million as of April 1, 2017. The total forecasted recovery for this period is $28.068 million, which is an increase of approximately $15.462 million over what is currently being recovered in rates. The rates proposed for the CEP component of the SBC were designed to recover approximately $27.186 million for the period April 1, 2017 through March 31, 2018. ACE has based its projections on the funding levels approved by the Bpard in its Order dated June 29, 2016 in Docket No. QO16040352. The Company represented that the average monthly expenditures from the fiscal year 2017 projected funding levels as found in the above Order were used to develop the monthly expenditures for the periods July 2017 to MarAccording to the March Update, the net impact of adjusting the NGC and the CEP and UNG components of the SBC [including Sales and Use Tax ("SUT")] would result in an overall annual rate decrease of approximately $31.728 million. After notice, public hearings were held on May 9, 2017 in Mays Landing, New Jersey.

STIPULATION STIPULATION Following a review by and subsequent discussions among the Parties, it was deter,mined that additional time is needed to complete a comprehensive review of the Company's February 2017 Petition. On May 10, 2017, the Parties executed the Stipulation, wherein the ·Parties agree as follows:4

1. The Parties have determined that, because the Company's filing contains issues that require additional review by the Parties, and that discovery is ongoing with respect to those issues, additional time is needed to assess any public comments and complete the review of the proposed rates and underlying costs for reasonableness and prudency. The Parties have agreed, however, that because the proposed combined changes to the NGC and SBC result in an overall rate reduction, based upon actual data through MarAgencja Date: 05/31/17 Agenda Item: 2F be concluded after further discovery, a prudence review, and the opportunity for an evidentiary hearing, if necessary. 2. 2. 2. The Company's filing in this matter included a projected over-recovered NGC balance as of March 31, 2017 of $1.983 million, including interest. The Parties agree that, based on the actual balance through March 31, 2017, this balance is projected to be an underrecovery of $1.288 million, including interest (Stipulation Schedule 1, page 1 of 3, line 23). For the period of June 1, 2017 through May 31, 2018, the total amount to be recovered will be approximately $92.611 million, including interest.

3. 3. The Parties agree that the Company's updated filing in this proceeding with actual data through March 31, 2017, the end of the reconciliation period, indicates forecasted abovemarket NUG costs of $91.323 million for the period April 1, 2017 through March 31, 2018. The total period NGC costs that the Company proposes to recover through the provisional NGC rate equals $92.611 million (Stipulation Schedule 1, page 1 of 3, line 25). Accordingly, the Company will implement a provisional residential NGC rate of

4. 4. The Parties agree that the Company's updated filing as of March 31, 2017 in this proceeding indicates forecasted SBC costs for both the CEP and the UNC of $55.740 million.

For the CEP component of the SBC, the projected costs total $27.672 million. This total consists of $27 .186 million of projected CEP costs for the period April 1, 2017 through March 31, 2018 (Stipulation Schedule 2, page 1 of 2, line 23), and an under-recovered balance at March 31, 2017 of $0.486 million (Stipulation Schedule 2, page 2 of 2, line 15). The forecasted total cost for the UNC component of the SBC is $28.068 million. This total includes $17.439 million of projected UNC costs for the period April 1, 2017 through March 31, 2018 (Stipulation Schedule 3, page 1 of 4, line 1), and an, under-recovered balance at March 31, 2017 of $10.629 million (Stipulation Schedule 3, page 2 of 4, line 15). The Parties agree that the Company will implement a provisional CEP rate of $0.003352 per kWh (Stipulation Schedule 2, page 1 of 2, line 30) and a provisional UNC rate of $0.003400 per kWh (Stipulation Schedule 3, page 1 of 4, line 11 ). This represents a net increase of $0.001206 per kWh to the SBC rate. 5. 5. 5. According to the Company's calculation, the overall annual average monthly bill impact of the combined proposed NGC and SBC rate changes for a residential customer using 716 kWh per month results in a decrease of $2.59 or 1.89 percent (Stipulation Schedule 4, page 4 of 4). For informational purposes, as noted on Stipulation Schedule 4, a residential customer using 1000 kWh would see a decrease of $3.62 or 1.90 percent.

6. 6. The Parties further acknowledge that implementation of the Stipulation will result in an overall decrease in NGC/SBC charges of $31.728 million, and that it is in the public interest to have that decrease become effective as of June 1, 2017. Therefore, the

• Agenda Date: 05/31 /17 Agenda Item: 2F Parties are requesting that the Board consider the Stipulation at its regularly scheduled agenda meeting for the month of May 2017. Although summarized in this Order, the detailed terms of the Stipulation are controlling, subject to the findings and conclusions of this Order. 4

7. 7. 7. The Parties further agree to the establishment of NGC and SBC rates designed for recovery from the Effective Date through May 31, 2018, as delineated in the Schedules attached to the Stipulation. The rates will be designed to reconcile the deferred balances and recover forecasted costs noted in the Stipulation. (See Stipulation Schedule 5 for the proposed Tariff pages incorporating the new rates.) As shown in Stipulation Schedule 4, the impact of the proposed rate changes for the period June 1, 2017 to May

8. 8. The Parties agree ACE will continue to explore opportunities to mitigate the terms of the ongoing NUG contracts. The Parties further agree that ACE will continue to file quarterly reports with Board Staff and Rate Counsel, showing the actual NGC and SBC deferred balances. The reports will also include a forecast of the deferred balance on March 31, 2018. The reports will include a variance analysis, including a narrative description, of the monthly projected versus actual updated deferred balances. To the e

DISCUSSION AND FINDING DISCUSSION AND FINDING The Board has carefully reviewed the record to date in this proceeding, including the petition, the March Update, and the attached Stipulation, which allows the Company to recover costs on a provisional basis. The Board FINDS that the Stipulation is reasonable, in the public interest, and in accordance with the law. Accordingly, the Board HEREBY ADOPTS the Stipulation as its own, as if fully set forth herein. · The Board HEREBY APPROVES, on a provisional basis, subject to refund with interest on any net over-recovered balance, a decrease in the CEP component of the SBC to $0.003352 per kWh including SUT, an increase in the UNG component of the SBC to $0.003400 per kWh including SUT, and a decrease in the NGC rate to $0.011291 per kWh, including SUT. For an average residential customer using approximately 716 kWh per month, the cumulative impact of these changes represents a decrease of approximately $2.59 or 1.89%These changes shall become effective as of June 1, 2017. The Board HEREBY ORDERS ACE to file revised tariff sheets conforming to the terms of the Stipulation by June 1, 2017. The Company's costs will remain subject to audit by the Board. This Decision and Order shall not preclude nor prohibit the Board from taking any actions determined to be appropriate as a result of any such audit. The effective date of this Order is June 1, 2017. DATED: S \ o \ \ \ 7 S \ o \ \ \ 7 RICHARD S. MRO PRESIDENT IHEREBY CERTIFY that the within document Is a true copy ofthe original In thefiles ofthe Board ofPublic Utllltles (5L L~ Agenda Date: 05/31/17 Agenda Item: 2F BOARD OF PUBLIC UTILITIES BY: ~K~ COMMISSIONER COMMISSIONER Agenda Date: 05/31/17 Agenda Item: 2F

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